What is the status of the eucalyptus program and the factory plan to produce pulp in Mozambique?
The project started immediately after approval, and one of the most challenging aspects was finding the right material to grow here in Mozambique, in addition to obtaining the license for such a large-scale project. It took some years to find the genetic material most suited to our geography and climate, and which is most resistant to the diseases found here. Of course, all of this necessitates a lengthy process of environmental and social impact assessment, and today we are awaiting a license from the government in order to proceed further. Having undertaken a number of trials we farm about 3,000 ha of plantation in different parts of the DUAT—a Mozambican land use agreement—that we manage. Our next step will be to increase the scale of our plantations, once officially licensed. The next step is to build a mill to produce pulp for paper, and also to produce energy. The project will become self-sufficient in terms of energy supply, and with the biomass we use to produce the pulp; we will generate sufficient surplus energy to feed into the grid. We expect a surplus of around 70MW, which amounts to around 10% of the total electrical energy consumption in Mozambique. Therefore, it will make a huge contribution to the energy needs of the country, while also helping stabilize the grid and improve the quality of electricity supply nationwide. The mill is expected to be operational by 2023, with a capacity of 1.5 million tons. It will practically double our group's pulp production capacity in Portugal, currently at about 1.4 million tons. The total estimated cost of the project by 2025 is around $2.3 billion, although this is likely to rise. The pulp we produce is planned for export, mainly for the Asian markets, especially China and India, but also for the US and European markets. All in all, we expect to contribute $1 billion to Mozambique's overall annual exports, and to see the creation of around 7,000 jobs in forestry and a further 500 at the factory itself. We are looking for partners with which to share the risk and also strengthen the sustainability of the project. We signed an agreement with the International Finance Corporation (IFC) on December 2015 in Washington, D.C., and that institution will shortly purchase the first lot of shares.
How significant is Africa for the group in terms of sales?
When you look at demographic and economic figures and forecasts, Africa is sure to become a bigger and more prosperous market in the future, and we will be well positioned to supply the market as it grows. After all, our investment here is a strategic one, and one we expect to significantly further our international scope and operations. But in the short term, we are concentrating on the Asian markets, which are huge for us.
Portucel has won various awards, including Best European Company for 2013. What underpins your company's success?
We have excellent and highly skilled human resources, and extremely high-quality assets. We have a good species in Eucalyptus Globulus, which has enabled us to make products of high quality, which in turn is why our Navigator brand is the most sold product in its segment worldwide. Therefore, it is a combination of human resources, quality assets, and exceptional raw materials, as well as excellent management.
How do you assess the potential of Mozambique in terms of drawing foreign investors to the country, and investing in major, long-term projects such as this one?
There are certainly risks that need to be assessed and evaluated, as with any investment. But the opportunity is there; otherwise, we would not have undertaken such a huge investment. That being said, you have to take the risks into close consideration and weigh the two against each other. We find that the balance tips on the side of optimism and opportunity in Mozambique. But you have to work hard, do your homework, and not expect an entirely smooth process, or overnight returns.